Introduction Our business SwireTHRIVE About our report Other ESG disclosures Appendices Overview Our approach ESG risk management TCTCFFDD Describe the organisation’s processes the fee will be directed towards Risk management for managing climate-related risks. decarbonisation projects that drive or • Our Climate Change Policy deals with provide additional carbon reduction. decarbonising our businesses and Describe the organisation’s processes – Shadow Carbon Price: Applicable for identifying and assessing climate- managing and adapting to climate risk. to future investment decisions and related risks. • Through the ISO 14001 Environmental planning for future projects. It is • We are assessing how vulnerable Management System and ISO 50001 a tool used to reveal hidden risks Energy Management System, we and opportunities throughout our our businesses are to 昀氀ood, heat manage our operational risks related operations and to support strategic stress, water stress and extreme to climate change, carbon and energy decision making related to future weather events. management. For example, our Property capital investments. • We are using the Climanomics tool Division manages its daily operational developed by The Climate Service risks related to climate change, carbon • To reduce embodied carbon from its development projects and construction (TCS) to assess the climate risks to our and energy management. As of 31st activities, our Property Division has businesses and the resulting 昀椀nancial December 2022, approximately 80% implications established performance-based targets of its properties (measured by GFA) in on embodied carbon for concrete, rebar Hong Kong and the Chinese Mainland – W e have assessed the physical and structural steel for future projects in climate-related risks to and are certi昀椀ed to the ISO 14001 and ISO opportunities for over 850 of the 50001 management systems. Hong Kong. They have also speci昀椀ed that low-carbon materials should be adopted Group’s most valuable assets (by • We have set ambitious 2030 in their projects, such as concrete with insured value), under four climate decarbonisation targets (see metrics pulverised fuel ash or ground granulated change scenarios (RCP 2.6, 4.5, 6 and targets section below). Our blast-furnace slag, rebar and structural and 8.5). This data has allowed us goal is to achieve net zero carbon steel with recycled content, and the to accurately evaluate the exposure emissions by 2050. optimisation of structural design to of speci昀椀c assets and operations • Our sustainable development minimise material consumption. in selected timeframes, from the fund (SD Fund) makes available • Swire Properties is a leader in intermediate (2030) to the long- up to HK$100 million per year for developing certi昀椀ed green buildings term (2050). sustainable development projects. that are energy-e昀케cient and low- The money is available for investments – We have considered the impact of carbon by design and in operation. carbon pricing transition risks based in sustainability technologies and At the end of 2022, 94% of its wholly on the carbon pricing models included solutions that would not otherwise owned existing buildings have been in IPCC Shared Socioeconomic meet our 昀椀nancial targets. In 2022, certi昀椀ed as green buildings under HK Pathways SSP3-60 and SSP3-45. we funded trials of new technologies BEAM, BEAM Plus, LEED, WELL, China intended to help our operating Three Star or Green Mark independent – In 2022/23, via the Climate and TCFD companies meet their carbon, water and rating systems. Of these, of which 98% working groups we are working with a waste targets. consultancy to incorporate the results have achieved the highest ratings. from the Climanomics assessment • Our business continuity plans cover 100% of wholly owned projects under into a broader climate scenario extreme weather events. We have development have achieved green a Business Recovery Plan in place to analysis. A summary of the results of building certi昀椀cation ratings. this exercise will be made available in ensure that we maintain critical crisis • Since 2011, Swire Properties has future sustainability reports. planning and execution capabilities in worked with Tsinghua University’s the event of major incidents, including Joint Research Centre for Building – The 昀椀ndings will be incorporated into extreme weather events. Swire the Group’s ERM system. E昀케ciency and Sustainability, to develop Properties has local crisis response plans and test methods to increase energy for all its buildings. • Swire Properties has conducted detailed e昀케ciency and improve environmental asset-level assessments to evaluate • In 2023, we will be piloting the use of performance in our businesses. This the degree of sensitivity and adaptive internal carbon pricing (ICP) within collaboration continues to generate capacity of individual developments Swire Properties, Swire Coca-Cola and substantial energy savings and allows under the potential impacts of climate HAECO. These companies, collectively us to communicate and share new ideas change. These assessments consider account for over 94% of our scopes 1 and practices with our employees, system robustness such as existing and 2 emissions. We have adopted a business partners, industry peers and hybrid ICP model which includes: other researchers. 昀氀ood prevention systems and façade conditions; system redundancy, such • Swire Properties integrates as the capacity of chillers and water – Carbon Fee: By linking each unit sustainability criteria into the supply; and susceptibility to past of CO₂ emissions to a 昀椀xed cost, our business units will be further risk assessment process for new extreme weather events. incentivised to integrate low-carbon acquisitions, including climate considerations into their business adaptation and resilience, 昀氀ood risk decisions. The funds raised through assessment, energy e昀케ciency and carbon emissions. SWIRE PACIFIC — SUSTAINABLE DEVELOPMENT REPORT 2022 — 21